Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Media Release of 24/04/2002

NO.019

CONSUMER PRICE INDEX - MARCH QUARTER 2002

The All Groups Consumer Price Index (CPI) indicates that inflation in Australia
remains in check. The CPI increased by 0.9 per cent in the March quarter
2002, to be 2.9 per cent higher through the year. This returns inflation
to within the target band and is consistent with the Mid-Year Economic and Fiscal
Outlook (MYEFO) forecast for inflation of 2¾ per cent in 2001-02.

Today's data confirm that Australia is currently enjoying a very favourable
combination of strong economic growth and moderate inflation.

In the March quarter, price increases occurred across a number of items, with
seasonal and one-off factors playing an important role. Price rises were recorded
for pharmaceuticals (up around 11 per cent due to the annual resetting
of the safety net in January), holiday travel and accommodation (up 4.7 per
cent, driven by the effect of the Ansett and September 11 insurance levies
and domestic seasonal factors), education (up 4.7 per cent with the start
of the new school year), insurance services (up 2.6 per cent with moderate
rises in key components) and meat and seafood (up 1.8 per cent with overseas
demand continuing to remain strong).

Petrol prices declined slightly by 0.1 per cent in the March quarter,
following the decline of 12.2 per cent in the year to the December
quarter 2001. However, recent rises in crude oil prices on world markets, mainly
due to the conflict in the Middle-East, have resulted in a sizeable increase
in petrol prices which, if sustained, will have a significant impact on the
June quarter CPI.

Australian households benefited from solid price declines across a range of
goods in the March quarter. The price of fruit and vegetables declined by 1.6 per
cent, household appliance and utensil prices declined by 1.8 per cent,
furniture prices declined by 1.4 per cent, audio visual and computing equipment
prices declined by 1.2 per cent, and clothing and footwear prices declined
by 0.4 per cent, with falls observed in many of the clothing and footwear
component items.

The Producer Price Index data released earlier this week also indicated subdued
upstream price pressures. The broadest measure of producer prices, the final
commodities index, increased by 0.2 per cent in the March quarter
and by 2.0 per cent in the year to March quarter.

Australia's economy has been able to grow strongly despite the recent global
weakness without generating significant inflationary pressures, helping to confirm
its current position as one of the world's top-performing developed economies.